NEW YORK ( TheStreet) -- Amtech Systems (Nasdaq: ASYS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • ASYS's very impressive revenue growth greatly exceeded the industry average of 8.6%. Since the same quarter one year prior, revenues leaped by 66.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMTECH SYSTEMS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMTECH SYSTEMS INC turned its bottom line around by earning $1.03 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.03).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, AMTECH SYSTEMS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • ASYS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.19%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has significantly decreased to -$5.87 million or 548.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Amtech Systems, Inc., through its subsidiaries, engages in the design, assembly, sale, and installation of capital equipment and related consumables used in the manufacture of wafers, primarily for the solar and semiconductor industries. The company has a P/E ratio of 3.8, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Amtech Systems has a market cap of $94.7 million and is part of the technology sector and electronics industry. Shares are down 60.1% year to date as of the close of trading on Monday.

You can view the full Amtech Systems Ratings Report or get investment ideas from our investment research center.
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